Insights 
VT 
Initial jobless claims in the United States reach 218K, missing predictions
In the United States, initial jobless claims for the week of July 25 dropped to 218,000, lower than the expected 224,000. This figure gives us a glimpse into the current employment situation in the country.
EUR/USD has gained strength again, nearing the 1.1450 level. This shift follows decisions made by the Federal Reserve and positive US employment data.
European indices show mixed results: France and Italy decline while Spain records a slight gain; US stocks are up.
European indices had mixed performances. The CAC in France and the FTSE MIB in Italy both fell over 1.1%. However, Spain’s Ibex saw a slight increase of 0.11%.
The closing numbers for major indices were as follows: German DAX down 0.73%, France’s CAC down 1.14%, the UK’s FTSE 100 down 0.05%, and Italy’s FTSE MIB down 1.56%.
European Debt Market
In the European debt market, yields mostly decreased, but Italy’s rates stayed the same. Spain’s 10-year yield was 3.271%, Germany’s was 2.693%, France’s was 3.347%, and the UK’s was 4.572%. In the US, the stock market showed overall gains. The Dow slightly dipped by 0.01%, while the S&P increased by 0.47%, NASDAQ rose by 0.87%, and the Russell 2000 dropped by 0.30%. Microsoft shares rose 4.4%, and Meta shares surged 11.85%. Apple and Amazon were set to report after the market closed, with Apple slightly down and Amazon up by 1.74%. US interest rates declined for various durations, with the 10-year yield at 4.340%. Commodities showed mixed results: copper fell, crude oil decreased, and gold went up by 0.60%. Bitcoin also increased, trading at $118,298. Initial job claims remained low, and Core PCE slightly exceeded expectations at 2.8%.European Markets Weakness
European markets, especially in France and Italy, are showing notable weakness. This presents an opportunity to hedge against further declines. The drop in the CAC and FTSE MIB, both over 1%, suggests traders might want to buy put options on European index ETFs in the coming weeks. Concerns about the French budget deficit and Italian political instability are affecting investor sentiment, making this strategy a way to protect portfolios. In the US, the tech-heavy NASDAQ is rising while the Russell 2000 small-caps are falling, pointing to a possible pairs trading strategy. We should consider buying call options on the NASDAQ 100 and put options on the Russell 2000. This divergence is similar to the pattern observed in late 2023 and early 2024, where major tech stocks outperformed the overall market during economic uncertainty. Tonight’s earnings from Apple and Amazon are expected to create significant volatility, especially following major movements from Microsoft and Meta. Given this uncertainty, we could use straddles or strangles on these stocks to benefit from large price swings in either direction. Historically, stocks like these have seen average post-earnings moves over 5%, making the cost of options a worthwhile investment. The significant drop in copper due to tariff news suggests a risk-averse sentiment in global industrials and materials. This echoes the trade war period of 2018-2019, which pressured cyclical sectors. We should think about buying puts on mining and industrial ETFs to protect against potential trade disputes. Despite the slightly higher-than-expected inflation with Core PCE at 2.8%, US bond yields are falling, indicating that the market is more concerned about a slowdown in growth than the Fed. This uncertainty opens up opportunities to trade options on Treasury bond ETFs like the TLT, betting on continued rate volatility. The last Federal Reserve meeting reflected a divided committee on future rates, supporting potential swings in the bond market. Gold is rising while oil is falling, suggesting a move towards safety and away from growth-dependent assets. With the VIX, a measure of market fear, still low at around 14, buying VIX call options seems like an inexpensive way to protect against market shocks. This approach would guard against various risks we see across different markets. Create your live VT Markets account and start trading now.Atlanta Fed estimates 2.3% growth for Q3, down from 3.0% in Q2
The Atlanta Fed has announced its first growth estimate for the third-quarter GDP at 2.3%. This comes after the second-quarter GDP was reported at 3.0%, which was slightly higher than the Atlanta Fed’s earlier estimate of 2.9%.
Their model, which is known for its accuracy, initially predicted that market economists would forecast a growth of 2.4%. Early estimates can vary quite a bit, but these fluctuations should decrease as more data becomes available.
Third Quarter Growth Estimate
As of July 31, 2025, the initial estimate for real GDP growth in the third quarter (seasonally adjusted annual rate) is 2.3%. This follows the announcement from the US Bureau of Economic Analysis, which reported a 3.0% growth for the second quarter, slightly above what the Atlanta Fed expected. The GDPNow estimate will be updated again, with the next update set for August 1. For more release details, check the “Release Dates” section. We just experienced a solid 3.0% GDP growth for the second quarter, surpassing most forecasts. However, the Atlanta Fed’s model is now indicating a slower 2.3% for the third quarter. This initial estimate suggests that the economy may be losing some momentum as we move into the second half of the year.Market Implications
Given the early volatility in this forecast, we can expect an increase in implied volatility. Traders might want to consider buying options, such as puts on the SPX, to protect against a potential market drop if upcoming data confirms this slowdown. We remember the VIX spiked above 20 during the regional banking concerns in spring 2024 when mixed economic signals first appeared; a similar reaction could happen again. This GDP outlook arrives just as the July CPI report showed core inflation finally dropping to 3.1%, which is a bit lower than expected. The job market remains strong with a 3.6% unemployment rate, but the latest report from early July indicated that wage growth is slowing for the second month in a row. The Federal Reserve is monitoring this closely, and any sign of a significant slowdown could adjust their previously hawkish stance. If this growth concern develops, we are looking at defensive sectors like utilities (XLU) and healthcare (XLV) to potentially outperform. On the other hand, it might be wise to use derivatives to hedge or take bearish positions on cyclical stocks in the industrial and consumer discretionary sectors, as they are most sensitive to declines in spending and investment. The market is already beginning to factor in a reduced likelihood of another rate hike this year. Traders in SOFR futures are starting to position for the idea that the Fed may have already reached its peak rate. We witnessed a similar shift in late 2018 when the Fed eased its tightening cycle amid growing concerns about economic growth, which led to a significant bond rally. Create your live VT Markets account and start trading now.Average initial jobless claims in the United States drop from 224.5K to 221K
The average of initial jobless claims in the United States dropped to 221,000 by late July, down from 224,500. This data gives us a look at the current job market.
The EUR/USD currency pair rose to 1.1450 after falling to 1.1400, driven by the Fed’s decisions and strong employment and PCE reports from the US. Likewise, GBP/USD climbed back above 1.3200, responding to the volatility of US data and pressure on the US Dollar.
Gold and Bitcoin Market Trends
Gold faced challenges at $3,300 per troy ounce. It fluctuated due to changes in US yields and the US Dollar. Bitcoin remained stable between $116,000 and $120,000 for over two weeks, affected by whale buying and regulatory news. The FOMC is discussing tariff risks and whether they could harm jobs or spark inflation. Trading in the Forex market involves high risks, including the potential for total loss. Traders should carefully assess their risk tolerance and goals. With jobless claims averaging 221,000, the US labor market appears strong. This is supported by a June 2025 non-farm payrolls report showing 210,000 new jobs, suggesting the Federal Reserve might keep interest rates steady to control inflation. Derivative traders should be cautious about predicting rate cuts and might explore strategies that benefit from consistently high yields.Recent Market Movements
The rise of EUR/USD to 1.1450, despite strong US data, indicates that traders are considering other influences, like the European Central Bank’s recent hints about addressing inflation. This creates a delicate situation, making volatility strategies like straddles worth considering in the coming weeks. Reflecting on 2024, similar differences in central bank policies often led to sudden and unpredictable movements. The shift of GBP/USD back above 1.3200 suggests that the US Dollar is facing pressure on multiple fronts. With UK inflation for June 2025 being slightly higher than expected at 3.1%, the Bank of England is unlikely to signal any easing of policy soon. This difference could present opportunities in options that favor Sterling strength against the dollar, at least in the short term. Gold struggles at the $3,300 level as the US 10-year Treasury yield rises to around 4.8%. This increase in yield makes gold, which does not earn interest, less appealing for new investments. Traders might want to consider buying put options as a hedge against a possible price drop if yields keep climbing. Bitcoin’s stable range between $116,000 and $120,000 hints that a significant movement may be coming. The market balances positive indicators, like whale accumulation, with uncertainty from the SEC’s forthcoming guidance on staking in late 2025. This uncertainty is a good reason to prepare for a breakout, possibly using long strangle options to benefit from a significant price change in either direction. The ongoing FOMC discussion about whether tariffs could lead to inflation or hurt employment remains a key uncertainty in the market. This internal conflict within the Fed makes their next decision hard to predict, increasing risks for directional bets. In this environment, it’s crucial to use derivative strategies that have a clear risk profile. Create your live VT Markets account and start trading now.In June, the year-on-year price index for personal consumption expenditures in the US was 2.6%
The Personal Consumption Expenditures (PCE) Price Index in the United States for June rose by 2.6% compared to last year. This was higher than the expected 2.5%, showing that consumer prices increased during this month.
The EUR/USD currency pair moved upward, approaching the 1.1450 level, thanks to a weaker US dollar following positive employment and PCE data. In a similar trend, GBP/USD fluctuated and went slightly over 1.3200 after the US data was released.
Gold And Bitcoin Overview
Gold faced resistance at $3,300 per troy ounce due to falling US yields and a weaker dollar. On the other hand, Bitcoin remained steady within the $116,000-$120,000 range, supported by buying from large investors and clearer regulations in the market. The Federal Open Market Committee (FOMC) is divided on how tariffs will affect the economy. The main debate is about whether these tariffs will significantly affect labor markets or push inflation higher. The June PCE data, indicating a 2.6% increase, adds uncertainty. This unexpected rise in inflation makes the Federal Reserve’s next steps more complicated, especially since the committee is split. We should expect more market fluctuations, especially with the July employment report coming out next week. Looking back, the aggressive rate hikes to fight the high inflation from 2023-2024 make the Fed cautious now. The market seems to believe that the Fed will accept this small inflation spike to protect jobs, which explains the weakening of the US dollar despite higher inflation.Currency Pairs And Strategic Moves
The move of the EUR/USD pair towards 1.1450 is gaining traction, supported by the weaker dollar and a resilient Eurozone economy. Recent purchasing managers’ index (PMI) data from Germany and France exceeded expectations, with the composite Eurozone PMI for July reaching 51.5. We see chances to buy call options on the Euro to benefit from a continued uptrend through August. Similarly, the GBP/USD shows bullish signs as it crosses 1.3200, especially with the UK’s inflation for June being 2.9%. This puts pressure on the Bank of England to maintain a strict stance compared to the cautious Fed. Traders might consider using bull call spreads on the pound to take advantage of potential gains while managing risk. Gold’s attempt to break through the $3,300 resistance is a result of falling US real yields and a softer dollar. Historically, gold performs well in such conditions, and World Gold Council data for Q2 2025 showed record central bank purchases of 250 metric tons. We believe that selling out-of-the-money put options below the $3,200 level is a good strategy for earning premium. Bitcoin’s stability between $116,000 and $120,000 indicates a solid accumulation phase. This support level is backed by steady institutional investments following the SEC’s approval of two more spot Bitcoin ETFs in June. Data from the options market for August shows significant interest in call options at the $125,000 strike price, hinting that many traders are preparing for a price breakout. Create your live VT Markets account and start trading now.Trump and Sheinbaum agree on a 90-day trade extension with tariffs after productive conversation
President Trump shared that he had a productive phone call with Mexican President Claudia Sheinbaum, aimed at improving understanding between the two countries. The U.S. and Mexico have agreed to continue their current trade terms for another 90 days. This includes a 25% tariff on fentanyl and cars, and a 50% tariff on steel, aluminum, and copper.
In addition, Mexico will immediately eliminate its non-tariff trade barriers. Both countries plan to work on a more comprehensive trade agreement during this period or afterward.
Details of the U.S.-Mexico Agreement
The call included key U.S. officials such as Vice President JD Vance, Treasury Secretary Scott Bessent, and Secretary of State Marco Rubio. Both nations also pledged to collaborate on border security, drug trafficking, and illegal immigration. This agreement is a short-term solution, with more extensive discussions expected to take place leading up to or beyond the August 1 deadline. The 90-day delay on significant trade changes provides a brief period of stability. This should reduce uncertainty in key sectors over the next few weeks and delay the threat of a trade war from the August 1 deadline. The auto sector, which depends on Mexico for about 40% of its parts, can now feel more secure. We expect stocks in companies like Ford and GM to rally soon, making short-term call options appealing. This relief follows months of concern, especially since trade in vehicles and parts surpassed $180 billion in 2024.Implications of Tariffs on Steel and Aluminum
The continuation of the 50% tariff on steel and aluminum will support U.S. producers like U.S. Steel and Cleveland-Cliffs, helping their stock prices remain stable. However, these high tariffs could be used as negotiation tools that might disappear, posing risks three months from now. With Mexico removing non-tariff barriers and extending the deal, the peso may strengthen against the dollar in the short term. Yet, we recall the significant fluctuations in the USD/MXN exchange rate during the 2017-2018 USMCA talks, so this stability is not guaranteed. True volatility may return as the 90-day deadline nears in late October. The best approach is to keep an eye on the October deadline and prepare for potential volatility in contracts expiring in late October and November. Purchasing straddles or strangles on ETFs like XME (metals) or the peso (through PEX) may yield returns, as either a final agreement or a breakdown could trigger a major market move. For the broader market, we anticipate the VIX to decrease from recent highs as this risk is temporarily set aside. This presents an opportunity to buy cheaper, long-term VIX call options, essentially betting on a resurgence of market anxiety. While the market enjoys a summer lull, tensions are likely to rise again in the fall during crucial trade negotiations. Create your live VT Markets account and start trading now.Meta and Microsoft exceed earnings expectations, boosting stock prices and advancing AI strategies
Meta’s revenue for the quarter hit $47.52 billion, up 22% from last year and exceeding expectations of $44.8 billion. Earnings per share were even better than forecasted, reaching $7.14, a 38% increase compared to the projected $5.90–$6.00.
Ad revenue grew by over 21%, with user growth steady at 3.48 billion daily active users. Meta updated its Q3 revenue outlook to about $50.5 billion and raised its full-year capital expenditure to $72 billion. As a result, the stock rose by 11.62% to $775.88.
Strong Performance from Microsoft
Microsoft also reported impressive results, with revenue of $76.44 billion, an 18% increase from last year. Its earnings per share were $3.65, higher than the estimated $3.35 and a 24% year-over-year rise. Demand for Azure, driven by cloud and AI services, spiked over 30%. For the next fiscal year, Microsoft plans to invest $120 billion in capital expenditure, up from $88 billion last year. The company’s stock hit a record intraday high of $555.45 before closing at $536, a 4.6% increase. Its market value briefly exceeded $4 trillion, right behind Nvidia. Although Meta and Microsoft are both players in AI, they have different focuses: Meta is centered on social media and advertising, while Microsoft excels in enterprise software and cloud services. They lead the AI market but don’t compete directly like Meta and Google or Microsoft and Amazon Web Services.Implied Volatility Decreases
The strong earnings from Meta and Microsoft confirm that AI spending is more robust than ever. This trend is translating into real revenue and profits. We’re noticing implied volatility drop, with the VIX recently hitting a 12-month low of 11.5, indicating that traders feel confident and are not worried about a sudden downturn. With Meta’s shares breaking the $748 resistance level, this mark becomes an important support point. A similar breakout occurred in late 2024, which led to a sustained 15% rally over the next month. Selling put spreads for August or September with a short strike around $740 could be a strategy to earn premiums while betting that this new support holds. Microsoft’s push above its previous $518 high is a significant bullish sign, despite a slight pullback from session highs. The options market confirms this with call volume for August more than double the daily average, showing strong bullish interest. Selling puts below the new $518 support level seems like a smart move, capitalizing on the increased confidence. The large capital expenditure announcements are viewed as a sign of strength rather than a cash flow burden. Together, Meta and Microsoft are investing nearly $200 billion this year, reinforcing their positions as industry leaders. For options traders, this means we can expect higher implied volatility around future earnings dates, creating opportunities for strategies like straddles if big moves are anticipated. While the trend appears to be upward, it’s crucial to monitor those breakout levels closely. If Meta fails to hold $736 or Microsoft drops below $518, it could signal that this rally is losing momentum. This would be a good time to consider taking profits on bullish positions or even starting small, short-term bearish plays. Create your live VT Markets account and start trading now.United States Core Personal Consumption Expenditures Price Index surpasses expectations at 2.8%
The United States Core Personal Consumption Expenditures Price Index rose by 2.8% in June compared to last year, surpassing the expected 2.7%. This might indicate underlying inflation trends that experts are keeping an eye on for economic forecasts.
In the currency markets, the EUR/USD pair is nearing the 1.1450 level, reacting to changes in the US Dollar’s strength and new economic reports. The GBP/USD pair is also fluctuating, staying above 1.3200 after earlier losses, influenced by overall US Dollar trends.
Gold And Cryptocurrency Market Trends
Gold is facing downward pressure, currently around $3,300 per troy ounce, partly due to falling US yields. Meanwhile, in the cryptocurrency market, Bitcoin has been steady between $116,000 and $120,000 for over two weeks, with increased activity from large investors and positive news regarding regulations. In finance, the Federal Open Market Committee (FOMC) is discussing how tariff changes might impact the US economy, balancing labor market risks with potential inflation concerns. Many brokers are offering favorable trading conditions for major currencies and commodities, emphasizing low spreads and effective trading platforms. With the Core PCE inflation at 2.8%, it’s likely that the Federal Reserve will adopt a more aggressive stance soon. This persistent inflation echoes the 2022-2023 era, when similar surprises pushed the Fed to take decisive action. This suggests that despite worries about the labor market, priority will return to managing prices. The US Dollar is poised to strengthen due to these inflation concerns, creating chances in the forex markets. Although EUR/USD is currently climbing, it may be a bull trap, making it worthwhile to consider buying put options that target a decline below 1.1300. Historically, high US inflation data, like the readings from mid-2022, often leads to a multi-week rally in the Dollar Index (DXY), which typically pushes currency pairs down.Market Speculations And Strategic Movements
Likewise, we should keep an eye on the volatile GBP/USD pair for signs of weakness. Its status above 1.3200 may not last if the dollar enters a sustained rally driven by rate hike expectations. Upcoming FOMC discussions on tariffs will likely enhance this volatility, making protective puts a wise choice. For gold, the downward pressure is notable even with decreasing US yields. This suggests that the market is focusing on the strong dollar narrative, making gold pricier for foreign buyers. We encountered a similar situation in late 2024, where the rising dollar overshadowed any yield support, indicating we should expect further weakness below the $3,300 mark. In the cryptocurrency sector, Bitcoin’s stability presents a unique opportunity. On-chain data from Glassnode indicates that realized volatility has recently dropped to a two-year low, a condition that often precedes significant price movements. Given the positive sentiment, we might consider using call options to get ready for a breakout above the $120,000 resistance level with managed risk. Create your live VT Markets account and start trading now.Personal spending in the United States missed expectations, reporting 0.3% instead of 0.4%
US personal spending rose by 0.3% in June, slightly below the expected 0.4%. This suggests a small increase in consumer spending for that month.
The EUR/USD pair is on the rise, hitting 1.1450 as the US Dollar weakens. This comes after the Federal Reserve’s recent decision and positive US employment and PCE data.
Euro And Pound Market Movements
GBP/USD showed mixed results, staying around 1.3200 after a dip to 1.3180. Factors from the US economy are influencing these changes. Gold is facing selling pressure and struggling to surpass $3,300 per troy ounce. This trend matches the drop in US yields and a slightly weaker US Dollar. Bitcoin is holding steady in the $116,000-$120,000 range, supported by ongoing purchases from major investors. Improved regulatory clarity and new financial partnerships are boosting market confidence.Federal Reserve And Future Market Strategies
The FOMC is split on how tariffs may affect the economy, weighing the risks to labor markets against inflation concerns. It’s important to grasp these dynamics for future policy. The slight miss in US personal spending hints at more cautious consumers. June 2025 data revealed that the Core PCE Price Index, the Fed’s preferred inflation measure, dropped to 2.6% year-over-year, its lowest since early 2024. This trend, combined with the divided FOMC, suggests we should explore strategies that benefit from a pause in rate hikes, as the case for further tightening weakens. The gap between central banks presents a key opportunity. With EUR/USD moving to 1.1450, recent comments from the ECB on July 28th, 2025, suggested another rate hike might be considered to combat stubborn services inflation in the Eurozone. We think buying long call options on the EUR/USD could effectively capitalize on the growing policy gap between a cautious Fed and a determined ECB. For GBP/USD, recent volatility reflects significant uncertainty within the Bank of England. The last policy meeting on July 17th, 2025, ended in a close 5-4 vote to maintain rates, highlighting disagreements over the UK’s economic direction. Because of this uncertainty, we believe that buying options strategies like straddles could be beneficial, as they can profit from a significant price movement in either direction once policy becomes clearer. Gold’s struggle to break above $3,300, even with a weaker dollar, indicates profit-taking after a strong rally. Historical patterns from 2020-2022 show that consolidation often follows major upticks; recent CME data reveals a 5% drop in open interest for gold futures over the last two weeks, supporting this perspective. We may consider selling out-of-the-money call options to generate income while waiting for a decisive breakout. Bitcoin’s price stability above $116,000 appears supported by significant purchasing activity. On-chain data from July 30th, 2025, showed that addresses holding more than 1,000 BTC added a net 45,000 coins this month, indicating strong accumulation by large players. Selling cash-secured puts with strike prices near the lower end of the current range could be a smart approach to either earn premium or acquire the asset at a support level. Create your live VT Markets account and start trading now.Microsoft and Meta’s strong performances boost optimism in technology sectors in a mixed market
The stock market is showing mixed results today. The technology and communication services sectors are seeing some growth. Microsoft has risen by 4.91%, likely due to new product launches or partnerships.
Broadcom, on the other hand, fell slightly by 0.73%. In contrast, Nvidia gained 1.17%, showing strength in the semiconductor market. Meta had a significant increase of 11.88%, possibly due to strong quarterly results or optimistic forecasts.
